Posts Tagged ‘sector advocacy’

More than $1.5 trillion flow through more than one million charities, employing 13 million people in the United States. The charitable sector is one of the pillars of American quality of life, yet remarkably, we don’t think much about causes.

Even more surprising is in our results-driven world, the general public rarely presses nonprofits for accountability to results and measures.

Former National Public Radio CEO Ken Stern has written a book to tell the story of charitable failures, misguided incentives and ineffective market structures. With Charity for All is a call to action for the social sector to look at its framework and identify ways in which it can make corrective measures one person, one nonprofit at a time.

Some of the problems Stern challenges us to face include:

Tolerance of low- or no-impact outcomes like water charities that build wells but fail to maintain them or programs like D.A.R.E. (Drug Abuse Resistance Education) that actually stimulated drug use.

Acceptance of the government’s 99.5 percent approval of all charitable applications: The IRS’ low requirement threshold for nonprofit status further crowds the social sector with charities that don’t always meet two important criteria: 1) charitable tax exemption to “relieve the government of having to provide and pay for certain services” and 2) public benefit: “the charity cannot operate for private benefit; its value must be felt broadly within the community.”

Lack of sector scrutiny: “Ineffective supervision, unclear legal standards, and enormous consumer confusion all create a situation where it is astonishingly easy to set up, operate, and maintain charities that principally benefit their fund-raisers and managers.” Stern gives examples such as donations not going to programs but instead, to fundraising and administrative expenses. For example, the Association for Firefighters and Paramedics (AFP) designate only three percent of the funds to the programs that assist burn victims.

Solutions: a path to a better charitable marketplace

In the final chapter, Stern discusses what we, as a society, need to do to combat the real dangers of the charitable sector as it stands today. Many charities believe the sector does not “lend itself to empirical measurement” because it is difficult to measure social good. Also, people that work for social good should not be evaluated. This belief results in being more fair to the charities than the beneficiaries of their work. Donors’ lack of research and their donations to good stories rather than legitimate impact are exacerbating the problem.

Stern’s paths to a better charitable marketplace include:

Ken Stern

“Resist the old ways” by focusing on social impact to beneficiaries based on objective evidence. People must look past charismatic leaders and fundraisers and enticing marketing strategies to real impact.

“Look for indicia of quality”: clarity of targets, transparency with goals and research, real growth. Be wary of claims of low overhead because they may be “managing their books for public display or shortchanging their potential, or both.”

“Do the work” by researching the charities thoroughly, not just the charities’ websites, but also public reports and other websites. Share the information you find.

“Reconsider what constitutes a charity: Businesses that look, act, and feel like for-profit operations, like [some] hospitals, … should be treated as for-profit businesses, both out of notions of competitive fairness and out of the belief that such operations neither need nor deserve public support.” What organizations really should receive tax-exempt status?

We must open our eyes if we’re to make a change

Given the extent to which our society and government increasingly depend on the social sector to deliver critical support to the underserved as well as augment our quality of life, it’s understandable that former nonprofit CEOs like Ken Stern who’ve witnessed the challenges we face feel compelled to give readers an unvarnished look in front of and behind the curtain. With so much riding on our sector’s ability to deliver impact, Stern challenges us to open our eyes and take a closer look at what seemingly has gone unnoticed for too long.

We like to think we know change in the nonprofit sector. We’re in the business of systemic change after all. So why haven’t we tackled the “biggie” of systemic challenges? Yes, I’m talking about our challenges as a sector.

In our current Page to Practice™ book feature of Charity Case at CausePlanet, we’ve explored how author Dan Pallotta argues that the social sector is required to work with a different rule book than the corporate world. This alternative rule book prevents us from moving the needle on critical humanitarian issues and reflects five transgressions against the sector. These transgressions range from disparities in compensation, to risk-tolerance for revenue generation, to the time horizon for successful outcomes.

Pallotta further asserts that the social sector needs its own civil rights movement to overcome these hurdles perpetuated by the current rule book and explains his plan for a new “Charity Defense Council” to lead it.

The Council should approach the problem from five angles: 1) Establish an Anti-Defamation League; 2) launch an aggressive, paid public media campaign; 3) enact a National Civil Rights Act for Charity and Social Enterprise; 4) establish a Legal Defense Fund; and 5) organize the sector on behalf of its own issues (including 17 ways to get involved in this movement).

In our interview with Pallotta, we asked him about which of the five strategies he felt was most important and about the role of other sectors:

CausePlanet: You’ve discussed five strategies that will help the social sector change the way our society views charities. In your opinion, which is the most important among them?

Pallotta: We need to begin with anti-defamation and public advertising efforts. Those are the two quickest paths to a public conversation. Charities are defamed in the media all the time, and there is no legitimate nationally respected voice there to defend or offer an alternative point of view. And that’s free media if we can get an anti-defamation voice to respond to those stories. With public advertising, we can completely control the message and deliver lay-friendly, really smart, really provocative ads that can change people’s minds quickly.

CausePlanet: Many thought leaders observe meaningful social change happens when sectors collaborate to create a movement. What essential actions might we need, if any, from the corporate and government sectors to accomplish this new view of charities?

Pallotta: Not to be too pedestrian, but one of the things we could use would be corporate brands sponsoring these efforts with financial support. The government could create a sea change overnight by finding a national iTunes for charity that would give the public much more robust and friendly information that is updated regularly. Eventually it could provide information on every single nonprofit organization in the country.

Do you feel you operate under a separate rule book from the corporate sector? Have you experienced any of the transgressions Pallotta mentions? If yes to either question, tell us about it.

For more information about Dan Pallotta’s Charity Case, or to purchase his book, visit www.danpallotta.com.

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